All Forum Posts by: Bryan Martin

Legal: You need to look up your local laws to find out what happens to the lease. In some places death terminates it, sometimes that day, other times at the end of the month, but in some places it continues and becomes the liability of the Estate. 

Business: If the lease terminates, find out who is legally in charge of the estate and task them with removing the items before the end of the paid lease term. If the lease continues, notify this person of that fact and ask how they want to proceed. Make it clear that rent is going to be charged while the unit is under their control. 

Moral: Nothing wrong with giving 100% of the security deposit back and allowing for a few days of unpaid rent, but don't be a chump and allow the family to drag out clearing out the tenants belongings for months. 

FYI, you may have a duty to secure the property. You should not allow anyone in the unit unless they show proof they are the legal representative of the estate. I don't mean they show proof they are the parent/child of the tenant, proof of being the executor of the estate. 

Hi everyone,

I'm Joe, a new kid on the block, looking to start my real estate journey from scratch. Looking for business partners, private money lenders, investor-friendly agents, property managers, and creatives! My goal is cashflow and 38 rental properties within 2-3 years. Let's go find some deals! 

Ps: Does anyone have any high cashflow leads (any state) that they would suggest that I get into? 

Oh my goodness - you are barking up the wrong tree entirely.

First of all, if your MMLLC only has rental properties, you should not be seeing amounts in both box 1 and 2.  Everything should be in box 2.  There are a few exceptions to this, but you haven't laid out any facts that would indicate this to be true.

Second of all, STEP AWAY FROM THE SCHEDULE E.  That is not where you report K1 activity.

Third - Did you receive a basis schedule with your K1 package?  Also, do you have Part II on page 1 of the K1 filled out correctly, particularly lines K and L?  Did you consider QBI (do you have line 20, code Z completed correctly)?

Lastly, there are new requirements for issuing K2 and K3 forms this year.  

I only bring all of this up because I see SO MANY incorrectly completed 1065s and their associated K1s when lay people attempt to self prepare.  It sounds like you've gone down the same road that other self preparers have gone down and you really should consider backing up and getting yourself to a professional.

Background to me: currently 22, a decent amount saved up (60k), and my goal is to own long hold rental real estate then eventually get into flips, airbnbs, and build a business around that. I’m in the position where I have to decide between two jobs, what would you do in my position?

Job 1: 70-90k over the next 3 years, than 100k or more after that, however this comes with 65-70hr work weeks. Construction job, with lots of travel time, it is union so I have good benefits but no pension.

Job 2: I would be returning to my old job, mostly a desk job making 40-45hrs a week. At this job I would be making 65-70k. Decent benefits as it’s a big company and gives the typical 401k match.

With my goal being to be an entrepreneur and own my own business I feel as tho I’d be able to use those 20hrs a week to focus on building what I truly want to do. However with the other job it’s more money, which would obviously help when it comes to down payments, etc, but with the hours I’m exhausted and feel like I have no time. Put in my position which path would you pick? Thank you very much for your time!

@Kiley Boss, I recommend going a slightly different route.

I recommend getting a card from Lowe's and/or Home Depot. For example using the Lowe's card at Lowe's gets you 5% off at the register.

That's just the first step though. After you have their store card, when you can put together a significant order of materials go to the pro-desk. Home Depot is stricter about what is a larger enough order to work with on this.

However, if you go to the pro desk with an order over maybe $1500, they will quote you prices for the materials. Those price quotes will usually be 10-20% off the retail prices! They require you to pay with their store card. So, you need that first. Those 10-20% savings on large orders should far outpace the points/cash back on a traditional credit card. 

We've all seen the models and read the thousands of articles that say not to touch your 401(k) until you need to in retirement. However, we also don't have a lot of control of how that money is invested and the accounts gets hit with management fees each quarter regardless of how it performs.

I am considering cashing out my 401(k) most of which is a ROTH 401(k) to purchase more real estate. I own a duplex (live in one side and rent the other) and I almost live rent free. I've seen much more advantages and bigger returns from my small down payment on my duplex than I ever have in my 401(k). Between cash flow and tax advantages, I am seriously considering getting more aggressive with real estate.

Cashing out my 401(k) is something I would've never considered, even a year ago. But looking at projections of what my balance will be in 30 years versus cash flow and equity of real estate 30 years from now and I'll say I'm starting to believe that all the hype of the 401(k) is just so the financial institutions can hold on to your cash and leverage it instead of you doing it for yourself.

It is so ingrained in us to not touch our 401(k)s that I get sick when I think of it, until I look at what that money could do in real estate. Even with taking the 10% fee and paying taxes.

So, has anyone here done this?!

Hello,

For the first time I worked with a CPA who specializes in real estate and was really excited since I was hoping to have more write offs this year however the opposite was true. I've had a rental for a year and most of the year I had negative cashflow (not anymore) but on my tax returns it showed that I made a few thousand dollars, which I didn't because most of the rent went straight the note of the home (which was more than the rent I was collecting). My expenses exceeded my revenue. The items that they wrote off did not cover my "income." Long story short, it showed that I made a decent amount last year when in actuality I did not; I was negative most of the year. I'm in CA so I had to bit the additional depreciation increase. So obviously it increased my net income, which I was taxed more on. That being said, how do people offset it since most need to pay the mortgage/note? I'm just really surprised. Any advice would be greatly appreciated!

Side note: I refi the loan so CF is not negative. 

Jennie E. 

Just got started on my journey this past year with a SFH primary and a SFH rental. Looking for a CPA in the Austin area to start a relationship with as I grow my portfolio. Any recs are appreciated 🙏

(Up until now, I've used TurboTax)

It's 2023, what banks  do you use to  get best high yields on your savings account ?  This question is to any investor that needs to park their money in between flips or investments or just anyone who needs to keep their savings for short term like a year or so.

Primary Residence - No

The side of the duplex being rented - Yes